What do I mean? HUD Regulations and outstanding instructions are
constantly changing. What you thought you knew may not be the truth.
That is why before you commit to submitting a Budget-based Rent Increase
or request renewal of your Section 8 Contract you should know what
current HUD Policies are.

My Consulting Services will help you in doing your “due diligence” in
making a decision on what to include when you prepare Proposals.

BUDGET-BASED RENT INCREASE

If your HUD Section 8
Contract or HUD Project Rental. Assistance Contract (PRAC)
is due for renewal or annual rent adjustment, let
us make a deal.

If you are
contemplating submitting a Budget-based Rent Increase (BBRI) proposal to
HUD, I may be of help. I am presenting you with a proposal; I am
agreeable to the following Consulting Services.

After you have
prepared your BBRI proposal for submission to HUD, forward me the
following documentation

Copy
of your recent Audited Financial Statement Audited (AFS) transmitted
to HUD. If you do not wish to send me the Audited AFS, send me ONLY
the Balance Sheet and HUD Profit and Loss (P&L) Statement.

Copy of your
interim P&L Statement from the beginning of the current FY through
Y-T-D. Provide the P&L Statement data on HUD P&L Statement

HUD has established a new policy for
Owners/Management Agents submissions of Annual Tenant Utility Surveys.
If you need assistance in establishing Utility Baseline for your
Project, please contact me.

Revised Section 8 Renewal Policy Guidebook (Guide)

HUD
has published a complete revision to the Section 8 Renewal Policy
Guidebook (Guide) effective November 5, 2015. The revised guidance
applies to Contract renewal and amend rent packages received by the
Contract Administrators/HUD (or post-marked) November 5, 2015 or later.

The Six
Section 8 Contract Renewal Options Titles either are the same or
renamed.

Most
Options published in the new Guide have additional requirements or
restrictions.

New
Options

Option One, Mark-Up-To-Market

Option Two, Contract Renewals For Other Projects with Current Rents
At or Below Comparable Market Rents

Option Three, Referral to Office of Recapitalization (Recap)

Option Four, Renewal of Projects Exempt from or not Eligible for
Debt-Restructuring

This
is my introduction as a Housing Consultant.I retired in 1989 from the Department of Housing and Urban
Development, as a Senior Asset Manager in the
Washington
,
DC
Multifamily Asset Management Branch.Since
my retirement, I have provided consulting services to owners and
management agents of HUD multifamily subsidized communities throughout the
United States
.

If
your original Section 8 Contract was effective in the 1980s and 1990s and
is approximately a 20year Contract; your Contract Renewal Proposal is due
for submission to Contract Administrator 120 days prior to expiration of
the Contract and must be renewed pursuant to guidelines in revised HUD Section 8 Renewal Policy Guide (Guide).
The Guide reflects major changes to amendment to the Housing Act;
Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA),
Title V of the HUD Fiscal Year 1998 Appropriations Act, Pub. L. 105-65,
enacted on October 27, 1997. MAHRA
established new policies for the renewal of Section 8 project-based
contracts based on market rents instead of the Fair Market Rent (FMR)
standard.

The
Owner must submit the RCS to HUD (or the Section 8 Contract Administrator
(CA) if there is one) no later than 120 days before the expiration of the
Section 8 contract. Early submissions are allowed. Owners should not
submit their requests no more than 180 days before the Section 8 Contract
expires. Owners should submit the RCS along with the other information
required in this GUIDE. If a RCS is submitted, HUD recommends the renewal
request be submitted 180 days before the contract expires, because HUD
will commission an Independent RCS when processing the request.

Keep
in mind; under the original unexpired Contract your annual rents are
adjusted through application of HUD published Annual Adjustment Factors (AAF).
However, under the current revised Guide,
request for Contract Renewals (and annual rent adjustments through the
term of your renewed Contract) rents will be adjusted through Budget-based
rent increase (BBRI) requests or application of HUD published Operating
Cost Adjustment Factors (OCAF).

This is an Option for renewing a contract under the
Mark-Up-To- Market option. It identifies who is eligible for renewal
under this option and how to process the renewal request. Owners must
meet certain eligibility criteria which are outlined in the HUD Section
8 Renewal Policy Guide. This Option also provides information on how to
calculate owner distributions and future rent adjustments.

Owner Option Two, Other Contract Renewals with
Current Rents At or Below Comparable Market Rents

This Option provides instructions for renewing a
contract in cases where a contract’s current rents are at or below
comparable market rents but the contract is not being renewed using
the mark-up-to-market option. It outlines who is eligible to renew
under this option and identifies documentation to be submitted by the
Owner to HUD/Contract Administrators for review. It also provides
processing instructions and guidance for future rent adjustments.

Owner Option Three, Referral to the Office of
Affordable Housing Preservation (OAHP (formally known as the Office of
Multifamily Housing Assistance Restructuring (OMHAR))

This Option discusses the procedures by which a
project with rents above comparable market rents is referred to the
Office of OAHP for processing and renewal. The Option identifies items
an Owner must submit with their renewal request and it outlines what
steps will be taken by OAHP if a restructuring agreement is not reached
between the owner and OAHP.

Owner Option Four, Renewal of Projects Exempted
From OAHP (formally known as OMHAR)

This Option identifies exception projects.
Exception projects are ineligible for OAHP and as such, they are exempt
from having to conduct rent comparability studies and lower rents to
comparable market rents. This Option outlines the Owners renewal
submission requirements and provides instructions for initial and
subsequent renewals.

This Option details how to renew a contract that
has been through the Demonstration program. It provides instructions
for renewal in cases where the project had its rents reduced and/or had
its mortgage restructured and it provides instructions for processing a
renewal in instances where the project failed to have a rent reduction
or debt restructuring. It also provides guidance for renewing
Preservation contracts according to the approved Plan of Action (POA).

This Option identifies the steps that must be
taken, when appropriate, to assure that residual receipts are returned
to HUD.

Resident Issues

This Option outlines all of the steps that must be
followed to assure that tenants are protected during the renewal
process. This Option defines housing conversion actions and identifies
notification requirements an owner must meet. It also describes the
differences between a regular voucher and an enhanced voucher.

Physical Condition of the Property

This Option discusses how a project’s physical
condition impacts the contract renewal process.

This Option outlines the circumstances under which
HUD may refuse to renew an expiring Section 8 contract, and it provides
Owners with an appeal process to follow in cases where their request to
renew is rejected.

This Option outlines the procedure for providing
budget-based rent increases to nonprofit owners. The Option identifies
eligibility requirements for marking up to budget and provides
instructions for future rent adjustments.

Other Issues

This Option discusses miscellaneous issues that
have not been included in previous Options. This Option includes rent
increases for non-Section 8 rents, and HUD REMS reporting requirements.
It also addresses the effect of refinancing FHA insured properties on
Mark-to-Market eligibility and how any new debt should be addressed in a
projects operating budget.

Browse my web
site and review the Services and Products offered to clients. Services
include preparing proposals, researching HUD directives, regulations for
multifamily subsidized programs and more... If you do not have resources
to satisfy your needs, contact me I may have a solution.

My Services and Products will help to bridge the gap between HUD Field
Offices/Contract Administrators and Project Owners/Management Agents.

An Assignment or Assumption of Housing Assistance Payments (HAP)
Contract is required when the property being sold is subject to a HAP
contract, with or without mortgage insurance. The HAP rents are set by a
variety of factors, so it's important to understand how the rents may
change from year to year before purchasing a property.

Starting in June of 2004, the Department will no
longer consent to the assignment of the Section 8 Housing Assistance
Payments (HAP) contract unless there is a provision for requiring both
physical condition standards and annual financial statement reporting.
This applies to all Section 8 HAP contracts, regardless of whether there
is a HUD-insured mortgage.

Contract Administrators are
conducting On-site Management & Occupancy Reviews annually. As
you know, most of you have not seen a visit from your HUD Project Manager
in years, all that has changed. U.S. Department of Housing and Urban
Development (HUD) has contracted with Contract Administrators (CA) to
administer Section 8 Contracts. CA are required to fulfill their contract
obligations with HUD, to annually conduct On-site Management &
Occupancy Reviews on Section 8 assisted properties.

If
you need assistance in preparing for or responding to an On-site
Management & Occupancy Review, contact me. I have draft copies
of documents that may be cited as lacking in Reviews. Example of some of
the documents, such as;